Introduction
This document describes KBRA’s methodology for evaluating commercial real estate (CRE) property cash flow and value for assets collateralizing North American CRE transactions. The ultimate purpose of the property evaluation process is to derive KBRA’s estimate of sustainable net cash flow (KNCF) and KBRA Value for the individual CRE properties securing a transaction. KNCF and KBRA Value form the foundation for the evaluation of KBRA’s credit ratings on a variety of commercial mortgage-backed securities (CMBS) including, but not limited to, single asset single borrower (SASB), large loan, conduit fusion, agency, and commercial real estate collateralized loan obligation (CRE CLO) transactions. While the methodology is applicable for all CRE property types, the approach used to determine KNCF and KBRA Value for the most common property types is highlighted within the KBRA Property Sector Overview section of this…